Ed Miliband warns: Cameron is leading us towards the EU exit

Labour leader refuses to say whether he would back a referendum on taking powers back from Brussels

Ed Miliband has warned that David Cameron is risking Britain heading out the exit door of the European Union, but he refused to say whether Labour would support a referendum to bring back powers from Brussels.

He said for the first time he would not repeal the existing referendum lock imposed by the coalition requiring there to be a vote if there was a significant transfer of powers to Brussels. He said "there is legislation on the books that we don't intend repealing", but claimed this was not a commitment to an in-out referendum. He also said he would like to see some powers repatriated as part of what he described as a move to a more flexible, rather than looser, Europe.

He highlighted the need for some powers over regional industrial policy to be handed back to the UK, and other nation states.

Speaking on the BBC Radio 4 Today programme, he said: "The debate here is between those who say reform the EU so it works in our interests and the prime minister's strategy leading us towards the exit, something that will cause real damage." He said the timing of a referendum was a dangerous gamble, adding Cameron had been dragged to an in-out referendum by his "neuralgic" party.

Speaking on the eve of Cameron's long-awaited speech, scheduled to be made in the Netherlands on Friday, Miliband said the government had a hopeless negotiating position because Cameron had threatened Britain's departure from Europe, and claimed this was the contested ground between the two parties, and not whether Europe needed to change.

He said: "If we put up a sign saying we might be out of Europe for five years I don't think that is going to be good for our country. Imagine an investor thinking now: 'Sshould I be investing in Britain or Germany or the Netherlands?'"

He added: "Britain is not going to be joining the euro and it won't be joining the euro if I am prime minister." Previously he had said he could not rule out joining a single currency throughout his premiership, saying he did not know for how long he might be premier. Miliband is steering a middle course between those members of the shadow cabinet opposed to a referendum and those who fear the party is looking as if it supports the status quo in Europe.

He said: "My starting point is that I want a European Union that works for Britain." He added that it was not currently doing so due to its growth crisis. The focus at present should be on a discussion with Germany about the need for a growth plan, he said.

He also insisted he would be happy for his brother, David, to rejoin the shadow cabinet and said he did not agree that David in a recent speech on welfare in the Commons had accepted the government spending envelope.

He said both he and his brother thought the government were cutting too far and too fast, adding that he had spoken to his brother recently on this specific issue.

He described him as a great talent.

He again said Labour had made mistakes in government over immigration in the past, calling for action on the practices of employment agencies; a national housing register of private landlords and longer transitional controls for countries joining the EU. He said the issue of EU non-UK nationals' access to benefits should be looked at, as the home secretary, Theresa May, is currently doing.

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Guardian